Important Legal Notice to Current Holders of Pegasus Wireless Corporation Common Stock From Fazio | Micheletti LLP

Mar 19, 2012, 08:50 ET from Fazio | Micheletti LLP

SAN RAMON, Calif., March 19, 2012 /PRNewswire/ -- Fazio | Micheletti LLP has negotiated the settlement of a shareholder derivative action brought on behalf of former Fremont, California-based Pegasus Wireless Corporation ("Pegasus") against several former members of Pegasus's Board of Directors ("Defendants"). 

The case is Chen v. Jasper Knabb, et. al. (Alameda County Superior Court, Case No. RG 07310978).

Plaintiff Chen, a current Pegasus shareholder, alleges that in June 2006 Pegasus's former President and CEO, Jasper Knabb, agreed to purchase 1,250,000 shares of Pegasus stock for $8 per share.  In September 2006, the price of Pegasus stock had plummeted to less than $1 a share, yet the Pegasus Board of Directors voted to approve the repurchase of 870,375 shares of the stock Knabb had purchased for the original price of $8 a share—roughly eight times the then-current purchase price—causing Pegasus to effectively give away several millions of dollars to Knabb.  The Defendants who appeared in the action (the "Individual Defendants") dispute these allegations and deny any liability.

Summary of Proposed Settlement. Following extensive discovery, litigation, and mediation, the Individual Defendants and their insurer have agreed to (1) pay a total of $1,450,000 ("Settlement Fund"), which shall be used to compensate Pegasus, pay the attorney fees and expenses Plaintiff's counsel incurred as a result of prosecuting the case, and pay an incentive award to Plaintiff in amounts to be approved by the Court, and (2) to pay up to an additional $50,000 in notice/administration costs (with any costs in excess of $50,000 to be paid from the Settlement Fund). 

In exchange, Pegasus's claims against all Defendants will be released and the action will be dismissed.

Because the lawsuit is a derivative action brought on behalf of Pegasus, and is not a class action brought on behalf of shareholders, no shareholder will be compensated directly by this settlement and, therefore, there is no claims procedure for shareholders.

The Settlement Agreement and a Detailed Notice of Proposed Settlement can be obtained from several sources, including www.PegasusSettlement.com or from Plaintiff's counsel (below).  Those documents contain important additional legal information.  PLEASE READ THEM.

You Have a Right to Object /Comment on the Settlement.  Any current Pegasus shareholder who wishes to comment on or object to the proposed settlement has the right to file a comment/objection and appear at the Settlement Hearing, provided you comply with the procedures set forth in Section 8 of the Detailed Notice prior to 05-15-12, including filing your objection with the Court Clerk, Alameda County Superior Court, 1225 Fallon Street, Oakland, CA 94612 and serving a copy on all counsel listed below.  Requirements also include the need to establish that you currently own Pegasus stock.

Notice of HearingA hearing will be held on 06-06-12 at 3:00 p.m. before the Honorable Steven Brick, Department 17, 1221 Oak Street, Oakland, CA 94612, to determine: (1) whether the Settlement should be approved as adequate, fair, and reasonable; (2) whether the action should be dismissed with prejudice as set forth in the Settlement Agreement; (3) the award of Plaintiff counsels' attorneys' fees and costs and incentive award to Plaintiff of $2,500; and (4) any other necessary matters.  Plaintiff's counsel intend to request a fee of $500,000 plus their litigation costs of $17,900, which are less than the amounts counsel actually incurred in prosecuting the case. 

All dates are subject to change.  Any changes will be posted on www.PegasusSettlement.com.  Please check for updates

Release.  If the settlement is approved, shareholders will be bound by the decision and will be deemed to have released any derivative claims that have or could have been brought in the Action.  Individual claims will not be released.

SEE THE DETAILED NOTICE AND SETTLEMENT AGREEMENT FOR IMPORTANT REQUIREMENTS FOR FILING OBJECTIONS AND FOR THE FULL RELEASE.

Counsel

For Plaintiff:

For Individual Defendants:

 

 

Jeffrey L. Fazio

Susan S. Muck

Dina E. Micheletti

Felix S. Lee

Fazio | Micheletti LLP 

Jennifer Bretan

2410 Camino Ramon, Ste 315

Fenwick & West LLP

San Ramon, CA, 94583

555 California Street, 12th Floor

www.fazmiclaw.com

San Francisco, CA 94104

925-543-2555

www.fenwick.com

 

(415) 875-2300

DO NOT CONTACT THE COURT WITH QUESTIONS ABOUT THIS SETTLEMENT

SOURCE Fazio | Micheletti LLP



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